Which of the Note: This is a Multiple Answer question. Please select all of the following options you think are correct? 111111 Year 5 Year 6 Year 7 Year 1 Year 2 Year 3 Year 4 15,000 5,000 3,000 7,000 13,000 -50,000 30,000 Project 1 -2,000 -5,000 -10,000 50,000 70,000 3,000 Project 2 -50,000 -20,000 50,000 80,000 120,000 Project 3 -100,000 5,000 20,000 -30,000 20,000 70,000 -10,000 Project 4 -70,000 19,000 -35,000 23,000 47,000 43,000 Project 5 -80,000 -40,000 O Project 4 O Project 2 O Project 5 O Project 1 Project 3

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**Project Cash Flow Analysis**

**Question:**
Which of the five project net cash flows presented in the table below would be considered a Conventional cash flow?

**Note:**
This is a Multiple Answer question. Please select all of the following options you think are correct.

|       | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 |
|-------|--------|--------|--------|--------|--------|--------|--------|
| **Project 1** | -50,000| 30,000 | 15,000 | 5,000  | 3,000  | 7,000  | 13,000 |
| **Project 2** | -50,000| -10,000| 50,000 | 70,000 | 3,000  | -2,000 | -5,000 |
| **Project 3** | -100,000| -20,000| 50,000 | 80,000 | 120,000| 0      | 0      |
| **Project 4** | -70,000| -30,000| 20,000 | 70,000 | -10,000| 5,000  | 20,000 |
| **Project 5** | -80,000| -40,000| -35,000| 23,000 | 47,000 | 43,000 | 19,000 |

**Options:**
- [ ] Project 4
- [ ] Project 2
- [ ] Project 5
- [ ] Project 1
- [ ] Project 3

**Explanation of Cash Flow Patterns:**

- A conventional cash flow pattern is typically characterized by an initial cash outflow (often negative) followed by a series of positive cash inflows.
- Projects with alternating negative and positive flows, multiple negative flows after the initial investment, or primarily negative flows are not conventional.

Use this information to determine which projects follow a conventional cash flow pattern.
Transcribed Image Text:**Project Cash Flow Analysis** **Question:** Which of the five project net cash flows presented in the table below would be considered a Conventional cash flow? **Note:** This is a Multiple Answer question. Please select all of the following options you think are correct. | | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | |-------|--------|--------|--------|--------|--------|--------|--------| | **Project 1** | -50,000| 30,000 | 15,000 | 5,000 | 3,000 | 7,000 | 13,000 | | **Project 2** | -50,000| -10,000| 50,000 | 70,000 | 3,000 | -2,000 | -5,000 | | **Project 3** | -100,000| -20,000| 50,000 | 80,000 | 120,000| 0 | 0 | | **Project 4** | -70,000| -30,000| 20,000 | 70,000 | -10,000| 5,000 | 20,000 | | **Project 5** | -80,000| -40,000| -35,000| 23,000 | 47,000 | 43,000 | 19,000 | **Options:** - [ ] Project 4 - [ ] Project 2 - [ ] Project 5 - [ ] Project 1 - [ ] Project 3 **Explanation of Cash Flow Patterns:** - A conventional cash flow pattern is typically characterized by an initial cash outflow (often negative) followed by a series of positive cash inflows. - Projects with alternating negative and positive flows, multiple negative flows after the initial investment, or primarily negative flows are not conventional. Use this information to determine which projects follow a conventional cash flow pattern.
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Conventional Cashflow is a series of cashflows which have only one sign change throughout the cashflow.

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